City Lofts and development partner CTP St James have clashed with Sheffield City Council over plans for cladding on the 32-storey St Paul's residential tower.
Last week, members overruled planning officers and rejected amended designs affecting windows and panels. Local media reports have since claimed that the developer intends to replace glazing with plastic panels in moves to cut costs.
But City Lofts hit back, branding the claims "toxic misinformation". Director Mike Norris said: "The negative decision of council members is a tremendous disappointment. There is no question that we are replacing glazing with plastic panels as has been suggested. The proposed changes to the scheme are relatively minor and not conceptual."
A council statement said: "We cannot allow buildings to be constructed if they fall short of the design standards set. St Paul's is an iconic development that will stand for years to come. Although we have been working with the developers to find a solution, the board felt that the variations were not in keeping with the original design approved in 2005.
"We will be willing to work with the developers to see where we can go. We cannot and will not allow corners to be cut in the regeneration of our city."